Over the last 20 years, small banks' share of consumer loans has dropped from 70% to just under 10%. In a push to reverse this trend, small banks are teaming up with LendingClub to buy unsecured loans of less than $35k. Through the lending platform, small banks and thrifts can overcome the cost of underwriting these loans, which larger banks have historically been able to do more efficiently.

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A group of small banks is teaming up with Lending Club Corp. in a joint effort to wrest a larger share of the consumer-loan market from the biggest U.S. banks.
The partnership, expected to be announced Monday, aims to reverse a trend in which big banks, through mass marketing of credit cards and other products, have grown to hold the vast majority of loans to U.S. consumers.
Members of BancAlliance, a consortium of about 200 community banks, will start using Lending Club, a website that facilitates loans to individuals, to build new portfolios of consumer loans.